State Street, an investor with $3.9 trillion under management, recently announced that it is prepared to vote against board leaders of S&P 500 companies that don’t disclose their EEO-1 Reports —the federally mandated annual report in which those companies with at least 100 employees provide information on gender, race, and ethnicity by job categories. And a survey from JUST Capital and The Harris Poll found that 73% of Americans want companies to publicly report this information. 

Companies are increasingly answering these calls and disclosing racial and ethnic workforce data of some sort, according to a recent analysis by JUST Capital. From January to September 2021, the share of Russell 1000 companies disclosing racial and ethnic data increased by 23 percentage points—from less than one-third (32%) to more than half (55%). That’s huge. (More on that here.) But there’s still a long way to go.

That jump in reporting captures workforce diversity data disclosures in all formats—from the highly generalized that just notes the share of workers of color to the highly granular that details race and ethnicity data. At the more granular end of the reporting spectrum, however, is the EEO-1s. With pressure likely to intensify as companies approach proxy season and their new or renewed DEI commitments pass the 18-month mark, more companies should disclose their EEO-1 Reports. And, worth noting, it wouldn’t require any significant additional effort from companies. 

Employers with more than 100 employees are legally obligated to report to the U.S. Equal Employment Opportunity Commission on gender, race and ethnicity by job categories. The data from these EEO-1s can be shared with other authorized federal agencies to reduce companies’ need to produce multiple workforce diversity reports for varying agencies. 

The beauty of disclosing EEO-1 Reports is that it’s a standardized way to report intersectional diversity data. That means it becomes easier to understand trends in how companies engage with workers based on overlapping categorizations of gender, race, ethnicity, and job category. Comparisons in workforce diversity, then, become an apples-to-apples exercise. EEO-1 Reports are also a tool that, if disclosed voluntarily, can offer increased transparency about companies’ hiring and retention practices, among others. 

There will always be room to improve upon the window the EEO-1 provides into companies’ demographics. For now, it provides a low-effort way for companies to signal that they’re serious about following through on their DEI commitments, many of which were made to express solidarity with the Black community in the summer of 2020. Those commitments ranged from philanthropic pledges to carrying more products developed by Black-owned businesses to increasing supplier diversity. 

Large institutional investors also seized the moment to hold companies to account. They asked companies to align their actions with their words.

In September 2020, the office of the New York City Comptroller called on 67 companies to disclose their EEO-1 data. The comptroller’s Bureau of Asset Management holds a portfolio of five pension systems totaling $270.7 billion. Thirty-four of those 67 companies directly responded then by beginning–or at least committing–to disclose their EEO-1 Reports. 

The percentage of the Russell 1000 specifically disclosing EEO-1 data—or some other breakdown of intersectional demographic data—grew from 4% in September 2020 to nearly 11% by September 2021, JUST Capital’s analysis found. Not to mention, JUST Capital analysis also found that those companies that disclose EEO-1 reports outperformed their Russell 1000 peers in the stock market by 2.4% in 2021.

And if a company’s EEO-1 data reveal room for growth, the company’s workforce likely already knows that. Acknowledging the EEO-1 data by disclosing it, and letting the data inform internal practices around hiring, promoting, and retaining talent can strengthen a company’s culture. Accenture CEO Julie Sweet spoke to this effect in an interview with CNBC recently, saying that when the company first disclosed its EEO-1 data in 2015, its “numbers weren’t great,” but recruitment improved because “transparency builds trust.”

When it comes to understanding corporations’ attempts to improve their DEI practices, the “journey” metaphor is frequently cited. Though not perfect, the idea is pretty solid—that each company has a unique point of origin, and all can benefit from moving toward greater DEI. 

Disclosing EEO-1 level data will never tell the complete story of a company’s DEI journey, but no single data point does. It’s at least a good starting point. 

Investors and other stakeholders will continue to look for signs of progress along the way. Fortunately, companies already have a practical tool at their disposal to signal action.  

Ashley Marchand Orme is director, Corporate Equity at JUST Capital.